The Ultimate Guide to Credit Report Reading

Wondering what the credit and loan accounts on your credit report mean? Or about how to understand your credit report? 

You’ve come to the right place. 

Reading a credit report can be confusing, especially if it’s your first time trying to make sense of it. But knowing how to read your credit report is crucial because it helps you find any credit discrepancies and signs of fraud. 

So, even if you’re debt-free or don’t care what big banks think about you, learning how to read your credit report is great for your financial health. However, knowing where to start with your credit report can be a bit overwhelming. 

But don’t worry! We’ve done the heavy lifting so you can breathe free. Ready? Let’s get into it!

What’s a Credit Report?

A credit report is a very detailed report or record of your credit history. Lenders use it to understand whether or not they should lend you money, such as auto financing or mortgages. Even your landlord may look at your credit report to decide whether or not to rent to you. 

Credit reports are created by credit-reporting bureaus like TransUnion, Experian, or Equifax. They allow these bureaus to calculate your credit score, a three-digit number used by lenders to understand how likely you are to pay back a loan. 

High credit scores indicate the presence of positive information on your credit report, while a low credit score indicates the presence of negative information. 

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What’s in a Credit Report? 

Credit reports include the following: 

• Synchronized Information About the Different Types of Accounts You Have

 Your credit report will list the number of all types of accounts you have — whether delinquent or current. 

Some of the accounts that could be mentioned on your credit report could include:

• Installment Accounts – Accounts related to loans that are not related to education or car loans. 

• • Revolving Accounts – Accounts related to current lines of credit or credit cards.
  • Real Estate Accounts – Accounts relating to current mortgages. 

• Miscellaneous Accounts – Accounts that don’t fall into the above categories. 

• The Number of Accounts You’ve Opened or Closed

The credit report will also mention how many accounts you’ve opened or closed over the years. For example, if you’ve opened a total of five credit accounts throughout your credit history, your credit report will mention that. 

• The Number of Inquiries Made Against Your Credit

Credit reports often list the number of inquiries made against your line of credit by potential lenders within the last two years.  

Credit inquiries on your report may include “hard” and “soft” inquiries. 

• Hard inquiries – These are made when lenders check your credit report to approve your application and when you apply for new credit cards, loans, mortgages, and credit card limit increases. 

• Soft inquiries – These are made when lenders check your credit report for promotional purposes, such as offering goods and services to you. They also happen when you get your credit checked. 

• Your Account History 

The account history section of the report is very detailed and contains the most information. It includes details about your credit accounts and whether or not you were consistent with your payments. 

It will include several entries. Each entry will contain the following pieces of information: 

• Creditor Name – The institution that is reporting the information, such as Equifax or TransUnion. 
• Account Number – The number of your account. 
• Account Type – The type of account, such as real estate, revolving, or collection accounts. 
• Opening Date – The date you opened the account. 
• Monthly Payment – The amount of money you must pay to the account each month. 
• Reporting Date – The last date the creditor updated the information with your specific bureau. 
• Level of Responsibility – Whether you have single, joint, or authorized user access to the account. 
• Balance/Owed Amount – The amount you have in the account or owe to the lender. 
• The Credit Limit/Loan Amount – The amount of loan you’re entitled to. 
• Past Dues – The amounts that are past due.
• Remarks – Your creditor’s remarks about your account.
• Payment Status – Your account’s status, such as charge-off, current, or past due.
• Payment History – Your monthly payment schedule since the account was created. N

• Public Records

If you’ve declared bankruptcy before, it will appear on your credit report and may even stay there for seven to ten years. Similarly, foreclosures, arrests, divorces, lawsuits, and repossessions will also be found here. 

How to Read Your Credit Report

Here’s how you can read your credit report: 

• Check Your Identifying Information

If everything in the identifying information section refers to you and not someone else, you’re good. But still, take a few of the following preventative measures: 

• Double-check your Social Security Number (SSN).
• Ensure the addresses listed in the section are places where you’ve actually lived. 

• Read and Reread Your Credit History

Your credit history section contains the most information, so it may take you a bit to go through it, but go through it, you shall. 

Just make sure you look for any unfamiliar accounts and payments, unknown credit lines, and errors. 

Also, check for the following errors: 

• Open accounts reported as delinquent
• Closed accounts erroneously reported as open
• Repeated account listings under the names of different creditors
• Accounts reporting you as a joint owner when you’re an authorized user
• Incorrect dates
• Payments reported as late when they weren’t.

• Make Sure You Recognize Your Employer History

Usually, your employer history is included in your credit report to ensure you’re who you say you are. It may be correct, but you should always check. 

If you find an error, shoot an email to HR to notify them of the mistake made by the pay stub creator and then approach your credit bureau to file a dispute. 

• Scan the Public Records Section

Some sections need to have lots of information, but some don’t need any. The public records section is where you don’t need any information. If there’s information about the bankruptcy you declared as an independent contractor, that’s fine. 

But if the section shows a bankruptcy you declared when you were ten, there are some problems. 

• Clear Up Your Inquiries Section

If you see an inquiry you don’t recognize, it could indicate your account has been compromised. However, it may also be a result of multiple lenders requesting your report after you apply for a mortgage or loan. 

Check the dates of all hard and soft inquiries. Make sure none of them are more than two years old. If they are, you can file a dispute and request an inquiry removal. 

What If You Do Find Errors in Your Credit Report?

If you find errors in your credit report, file a dispute with your credit bureau and get it updated. Remember: mistakes happen, but it’s important to catch them before anything drastic happens. 

Some errors you can declare a dispute on include: 

• Former partners/spouses listed on loans, credit cards, and bank accounts
• Addresses you’ve never lived at
• Unfamiliar credit accounts and account numbers 
• Incorrect reporting of account status, such as accounts incorrectly reported as delinquent or late

As disputes are usually viewed on a case-by-case basis, you have to provide documents to support your claim. These documents include your SSN, date of birth, a copy of your I.D., bank and credit card statements, loans or death certificates, etc. 

How to File a Credit Report Dispute?

The three credit bureaus accept online, phone, or mail disputes. Here’s how you can contact them:

• TransUnion – File a dispute online, through the mail to TransUnion Consumer Solutions, P.O. Box 2000, Chester, PA, 19016-2000, or using the toll-free number (800) 916-8800.
• Equifax – You can file a dispute by mail to Equifax Information Services, LLC, P.O. Box 740256, Atlanta, GA 30374-0256, online, or over the phone at (866) 349-5191.

Experian – You can file a dispute over the phone using the toll-free number included on your credit report, online, or by mail at Experian, P.O. Box 4500, Allen, TX 75013.